THE BUDAPEST TIMES

12 JULY 18 JULY 2010

Demszky bails out

of SZDSZ

ATTILA LEITNER

aving lost their immunity as MPs after failing to

get re-elected in Aprils parliamentary elections, Socialist Kroly Tth and Democratic
Forum (MDF) politicians Ibolya Dvid and Kroly
Hernyi were interrogated last week as suspects in
connection with the UD security case, which emerged
in September 2008.

Second crack at charges

The Central Investigative Prosecutors Office tried
last year to bring charges against the politicians
suspected of having been involved with the case, but

Orbn on new Constitution

Statement of National Cooperation
will be obsolete by spring

City aims to be flush with pride

Budapest will soon have more and better public toilets, the city
council-owned Budapest Sewerage Works (FCSM) says. Priority
would go to toilets in important tourist locations and at public transport hubs, the firm said. FCSM operates some 50 public toilets
around the capital after recently re-opening 11 in key locations.
There were 112 around Budapest in 1996 but this had dwindled to
74, of which only 36 were in regular service, last year. FCSM said it
was planned to open a further 30 over the next four years. The city
council voted over a year ago to transfer latrine duty to FCSM, but
the city-owned firm was able to take over only this year when
contracted operator IL-NET was wound up. Existing toilets would be
upgraded over the next two years to include automatic flushing and
UV disinfection apparatus, FCSM said.

Slovakia to ditch
language law
Iveta Radicova appointed prime
minister of Slovakia said last Thursday
said last week that she plans to invalidate controversial laws restricting the
use of minority languages in public life.
Radicova succeeded in establishing a
broad centre-right coalition that
includes the conciliatory ethnic
Hungarian party Most-Hid following
June elections. Radicova said that
meaningless amendments to the
Slovak Language Act would be
repealed. Beside patching up relations
with Slovakias southern neighbour,
Radicova pledged to return the Slovak
economy to growth after it suffered its
worst ever annual drop in economic
output of 4.7 per cent last year.
Relations between Slovakia and
Hungary deteriorated dramatically over
the past four years. The coalition led by
the left-wing populist former Slovak
premier Robert Fico also contained the
Slovak National Party of rabid nationalist Jan Slota, who was well known for
his antipathy towards Slovakias half-amillion strong ethnic Hungarian minority.

preamble to the Hungarian Constitution

treating citizens as subjects rather than clients in
would be ready by next spring, Prime
need of assistance, he said. I still insist that it be
Minister Viktor Orbn told reporters after seen day in, day out by all Hungarian state
meeting opposition green party Politics Can Be
employees, Orbn said of the controversial and
Different (LMP) last Wednesday. Orbn had much-mocked declaration. He added that the
accepted an invitation to a meeting of the parliapublication of the preamble to the Constitution
mentary caucus of the smallest opposition party
would render obsolete the Statement of National
to demonstrate his commitment to the idea of
Cooperation.
national cooperation (see front page
Fidesz controls 263 of 386 seats in
article).
parliament, giving it the necessary twoHe was adamant about the need
thirds majority to alter or, indeed,
for his governments Statement of
rewrite the Constitution. Since taking
National Cooperation to be hung in
office in May, the government has
public administration buildings, made
already used this power to reduce the
compulsory thanks to a decree
size of parliament and local councils by
passed in parliament by governing
half from 2014. It has also instigated
Fidesz politicians. I still cannot resign
controversial restructuring in the way
myself to the thought that there should
state media are organised and monibe a single state employee in Hungary Viktor Orbn
tored, and legislated to give the
who believes that what went on over
governing party greater power over the
the last eight years can continue, Orbn said.
appointment of Constitutional Court judges. The
All civil servants must understand that there
party has declared that it intends to fully rewrite
must be no theft, no domineering, no more the Constitution during this term in office.

Common sense and good sense

Orbn will apply

brakes
Politics Can Be Different (LMP) caucus
leader Andrs Schiffer and MP
Benedek Jvor said Prime Minister
Viktor Orbn had sought to reassure
the party that the current rapid pace of
legislation would ease after local
government elections in the autumn.
The green-liberal LMP, along with the
socialist and nationalist opposition, has
repeatedly complained of the rate at
which the centre-right Fidesz government has railroaded new legislation
through parliament since taking office
in May. The LMP politicians said their
opinions on economic policy and their
world view differed greatly from those
of the government. The green party
believes that the government is seeking
to strengthen the middle class, while
the LMP favours helping disadvantaged
and excluded social groups.

Parliament voted against lifting the immunity status of

Alleged blackmail
the three MPs in October, which led to the suspension
of the investigation.
Dvid presented a recording during the 2008 internal
Dvid and Hernyi accused the private security firm
campaign of MDF that she claimed was proof her oppoUD of illegal monitoring at the request of the centre- nent Kornl Almssy and the security firm were collecting
right then-opposition party Fidesz, based on
information to discredit her. Since then it has
a recording that they claimed to have
been established that neither Almssy nor UD
received anonymously.
was involved in phone tapping her.
All three politicians appearing for the hearing
According to the prosecution, Dvid tried
declined to make a statement, except saying
to use tapes of private conversations to
that they did not commit a crime. Tth has filed
convince Almssy to withdraw from the race
an official complaint against the charges, saying
for MDF chair, threatening to make the
that he was only doing his job as an MP. Dvid
recordings public otherwise. Almssy eventuand Hernyi are charged with abuse of personal
ally gave in to the demands, which the prosdata, with the former MDF chairwoman also
ecution believes has hindered his career
facing accusations of coercion.
and perception in the eye of the public.
Ibolya Dvid

Series: the contemporary political economy of Hungary

ALEXANDER ANIEVAS
o two countries are identical.
Local conditions (whether
political,
cultural
or
economic) are always active
in shaping and mediating
the effects of more general phenomena
and world events.
Take, for instance, the contemporary
global economic recession. Virtually every
country of the world has been affected.
Nonetheless, the effects between different
countries, as well as between social
groups, has been if anything uneven.
Unlike Europe and the US, the Indian
economy emerged relatively unscathed
from the first phase of the Great
Recession despite (or perhaps because
of) the still huge divisions between rich and
poor. The year 2008 saw the doubling of
the number of Indian billionaires.
National responses have, in time, also
varied. While the US continues to pursue
moderate stimulus spending, European
governments have been recently swept up
by hysterical demands for fiscal austerity.
The need for government policies aimed at
tackling out of control budget deficits has
come to be thought of as common sense
over the last few months. However,
common sense does not always make for
good sense and the truth can always be
less apparent than it first seems. There are
very good reasons to believe that the ideological weight of economic neo-liberalism
continues to rest heavily upon the minds of
policymakers and economists alike. Why
fiscal austerity? Lets consider this for a
moment.

A question of confidence
The argument for deficit reduction
seems basic enough. Like any individual or
household, continually rising debt levels
will eventually trigger a debt crisis as
investors lose confidence in the Hungarian
economy and capital flight ensures. This is
all true. However, the emphasis needs to
be on the word eventually. If cuts prove
necessary they can be done in a variety of
ways and over different time spans. A
general recovery of the world economy

29-point First Economic Action Plan will means available for the very rich to
could itself lift Hungary out of its current
overwhelmingly hurt those who need them
escape domestic taxes. Foreign tax
state of malaise. At the present moment,
however, the Hungarian economy has yet the most: middle-low wage earners. havens abound and domestic tax loopholes remain. Unless we suddenly
to recover from the financial-turned- Lendvai may lack credibility here: as we
know, the reign of the Socialist Party was assume a new-found benevolence on
economic crisis that began in 2007 (GDP
increased by a meager 0.1% in Q1). Thus, hardly one of enlightened egalitarianism. the part of the upper classes (something rather difficult to imagine given the
the greatest risk the country currently But, forget this for the moment.
mind-boggling levels of greed demonfaces, like much of the rest of the world, is
strated by the bankers in recent
a crisis in consumer confidence.
decades) there seems very little
Faced with the prospect of
reason to believe that they
long-term
unemployConsider instead that low-wage
will suddenly decide to
ment, future job loss
pay their taxes for the
or underemployearners and the poor are exactly those segments of
betterment of the
m e n t ,
collective good.
consumers will
society
who
spend
the
most
when
given
additional
dispostend to buy
less. This will in
able income. The rich and upper middle class have the
Casting a
turn perpetuate,
luxury of saving and are likely to do so even more in
wide net
if not aggravate,
currently depressed
the midst of unstable economic conditions.
Perhaps, instead, the
economic conditions.
flat income tax reflects
With official unemployment
another interest beside the general?
rates in Hungary at 11.4% (and
The same goes for the lowering of
real unemployment over 16%), the case for
Consider instead that low-wage corporate tax rates, as well as the new
continued stimulus spending measures
seems clear. The recent EU-wide earners and the poor are exactly those rules governing severance pay. This
consensus for implementing deep, imme- segments of society who spend the latter measure would establish a 98 per
most when given additional disposable cent personal income tax on severance
diate deficit reduction measures, by
income. The rich and upper middle class
pay exceeding HUF 2 million (EUR
contrast, looks like a return to the world of
have the luxury of saving and are likely 7,129) in the public sector. Though
pre-Keynesianism. As if the last Great
to do so even more in the midst of
given the obscurity of recent governDepression didnt teach us better!
unstable economic conditions. By
ment pronouncements, its difficult to
contrast, middle- to low-wage earners, make heads or tails of who this will actuThe poor get poorer
along with the chronically unemployed,
ally affect. At best, it would merely
But let us suppose, hypothetically, that
must spend in order to buy the basic
redress the extravagant excess and
there was an immediate need for deficit items needed for everyday living. They waste that became defining features of
reduction: that the Hungarian case was, in
are the ones who stimulate the
the MSZP era. At worst, it would affect
fact, unique. Even under such hypothetical economy, not the rich or even upper
most average paid employees of the
conditions, the point remains that how
middle classes. With this in mind, what public sector reaching retirement age,
deficit reduction is achieved is an inherently sense does it make to drop inheritance including doctors, teachers and
political question. As with any policy, the
and luxury taxes?
medium-level civil servants. Due to the
question that must be asked is: whose
repeated ambiguity of Fidesz policyinterests does it serve? And to what
Those who can dodge, will
makers statements, one could be
purpose? The relative winners and losers
forgiven for thinking the worst.
in these cuts will vary with the type of poliGovernment arguments in favour of
cies adopted. Thus far, nothing in the newly
the introduction of a flat income tax are Alexander Anievas is a PhD candidate
elected
Fidesz-KDNP
(Christian equally nonsensical. The argument
at the Department of Politics and
Democratic Peoples Party) coalition goes something like this: because of the
International Studies and temporary
seems to indicate a real change of course very large black economy in Hungary, lecturer for the Pembroke-Kings
in economic and financial policy from the
the government needs to give people an Programme at the University of
last eight years of ham-fisted Socialist rule. incentive to pay their taxes and thereby Cambridge. He was formerly the
The outgoing MSZP (Hungarian Socialist
generate more public revenue. How this managing editor of the Cambridge
Party) president Ildik Lendvai is correct in
translates into an argument for an
Review of International Affairs and has
arguing that the proposed austerity
equalisation of income taxes is anyones recently published an edited book
measures and tax cuts in Viktor Orbns guess. There are both illegal and legal collection on Routledge Press.

COMMENT

Mayor of Budapest Gbor Demszky has

announced he is no longer a member of
the Alliance of Free Democrats
(SZDSZ).
Demszky
said
last
Wednesday that he did not wish to
participate in the partys self-annihilation process and he had allowed his
membership to lapse. The SZDSZ was
formed in the late 1980s and played a
key role in the transition from communism to democracy. Demszky, a former
dissident and founder member of the
liberal party, was elected Mayor of
Budapest in 1990 and has held the post
to this day. However, he has said he will
not stand for re-election in the autumn.
The SZDSZ in ever-dwindling
numbers had been part of governing
coalitions in four of the first five parliamentary cycles since free elections
began 20 years ago. However, in the
general election in April SZDSZ failed to
make it back into parliament, with many
voters blaming the party for increasingly
neo-liberal economic policies.

MDF leadership no longer enjoys immunity from prosecution

BZT/Aaron Taylor

In its latest bid to outflank the courts, the

banned Hungarian Guard (Magyar
Grda) relaunched as the Hungarian
National Guard on 4 July, with an inaugural rally on Erzsbet tr, in central
Pest. Amid a huge police presence,
there was little disturbance at the gathering, which was addressed by the
leader of the nationalist party Jobbik,
Gbor Vona, and other far-right politicians and supporters. There were scuffles between police and far-right
supporters, who pelted police with
bottles in demonstrations at other locations. Police detained 23 people for
offences ranging from wearing Grda
insignia in defiance of a court ban to
possession of air-guns and other
weapons. The event was held on the
anniversary of a protest against the
banning of the Magyar Grda, set up by
Jobbik in 2007. Vona had been among
those arrested when police broke up a
protest at the same location in 2009. The
cabinet has submitted a package of
proposals to parliament aimed at
increasing police powers, giving them,
among other things, increased powers
to intervene against groups that are
subject to court bans.

POLITICS

Former MPs questioned over UD security case

Arrests at latest
Grda relaunch

03